Thailand: Inflation picks up in January
Latest reading: Inflation rose to 1.3% in January, which was up from December’s 1.2%. January’s figure was the highest since May 2024 and marked the second successive month within the Central Bank’s 1.0–3.0% target range. The increase was largely due to rising price pressures for energy and food, coupled with a low base effect. Meanwhile, core inflation remained at 0.8% for the fifth consecutive month in January, suggesting limited impact of the government’s digital cash scheme on domestic demand.
The trend pointed up, with coming in at 0.6% in January (December: -0.2%). Meanwhile, core inflation was stable, coming in at December’s 0.8% in January.
Lastly, consumer prices fell 7.12% in January over the previous month, a sharper drop than the 0.18% drop seen in December. January’s result marked the weakest reading since January 2024.
Panelist insight: EIU analysts commented on the outlook:
“Given the absence of a meaningful pick-up in demand-side momentum at the beginning of the year, we are revising down our forecast for inflation in 2025 to 1.6%, from 1.8% previously. […] External pressures on Thailand’s inflation come from the impact of US trade tariffs on Chinese imports, which should push up global inflation. However, in response to the US tariffs, China could export more of its products to other countries, leading to strong flows of cheap Chinese goods, which would pull down imported inflation in those countries. On the whole, imported inflation is unlikely to accelerate significantly in Thailand, owing to these opposing forces. This will allow the BOT to continue with its gradual cut in interest rates.”